Choosing between a green tariff and a contract with a local trader: what is more profitable for solar power plant owners?

Choosing between a green tariff and a contract with a local trader: what is more profitable for solar power plant owners?

Before starting the construction of solar stations, owners often face a dilemma: is it better to conclude a contract for the sale of electricity with local traders or choose a green tariff? SNP Invest decided to clarify this issue by not only providing explanations but also duplicating the law for a better understanding of government policy.

The green tariff is especially beneficial for private households with an installed capacity of power generating units of up to 30 kW that generate electricity from alternative sources. For larger capacities, it is recommended to conclude an PPA contract with a local electricity trader, which allows you to get favorable conditions. SNP Invest provides full legal support in concluding an PPA contract and finding optimal conditions from electricity traders.

On the establishment of “green” tariffs for electricity produced by power generating units of private households, the following provisions were approved:

1. Establish a “green” tariff for electricity produced from solar radiation by power generating units of private households, the installed capacity of which does not exceed 30 kW and which were put into operation:

• from April 1, 2013 to December 31, 2014 – 1419.01 kop/kWh (without VAT);
• from January 1, 2015 to June 30, 2015 – 1276.25 kop/kWh (without VAT);
• from July 1, 2015 to December 31, 2015 – 792.60 kop/kWh (without VAT);
• from January 1, 2016 to December 31, 2016 – 752.12 kop/kWh (without VAT);
• from January 1, 2017 to December 31, 2019 – 715.90 kop/kWh (without VAT);
• from January 1, 2020 to December 31, 2024 – 643.45 kop/kWh (without VAT).

2. Establish a “green” tariff for electricity produced from wind energy by power generating units of private households, the installed capacity of which does not exceed 30 kW and which were put into operation from July 1, 2015 to December 31, 2019 – 460.22 kop/kWh (without VAT).
3. Establish a “green” tariff for electricity produced from solar radiation by power generating units of private households, the installed capacity of which does not exceed 50 kW, on condition that they are located on the roofs and/or facades of buildings and other capital structures, and which were put into operation from January 1, 2019 to December 31, 2019 – 715.90 kop/kWh (without VAT).
4. Establish a “green” tariff for electricity produced from wind energy by power generating units of private households, the installed capacity of which does not exceed 50 kW and which were put into operation:

• from January 1, 2019 to December 31, 2019 – 460.22 kop/kWh (without VAT);
• from January 1, 2020 to December 31, 2024 – 413.34 kop/kWh (without VAT).

5. Establish a “green” tariff for electricity produced from wind and solar energy on combined wind-solar generating systems of private households, the installed capacity of which does not exceed 50 kW and which were put into operation:

• from January 1, 2019 to December 31, 2019 – 647.71 kop/kWh (without VAT);
• from January 1, 2020 to December 31, 2024 – 485.79 kop/kWh (without VAT).

The choice between the green tariff and a contract with a local trader depends on several factors, including the installed capacity of the solar station, its location, and the expected electricity production. In general, the green tariff is more profitable for small solar stations, while a contract with a local trader may be more advantageous for larger stations.